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Hot, Flat and Crowded

After the success of “The World is Flat”, Friedman turns to the negative effects of the globalization; the global warming and its the chilling consequences in his new book “Hot, Flat and Crowded – Why We Need a Green Revolution–And How It Can Renew America”. He makes an argument that America needs a big problem to re-motivate itself. It was a dominant force in the industrial and information era. But as the world gets hotter — due to greenhouse emissions by increasing spread of the technology, flatter — due to IT and communications revolution and crowded — due to population growth, America needs to provide leadership in providing sustainable solutions to the world.

The book gives a good insight into the global warming. Though I have been aware of the term, it was eye-opening because of the different examples and quotes. Friedman proposes many ideas, some of which are intriguing. e.g. establish a floor price of $5 per gallon on gasoline for next N years. This will motivate the alternative energy industries to accelerate their development of their technologies. (He also argues the government will get benefited (because of the tariff collected), but that point is debatable, because the oil-producing nations will immediately bump their prices up to extract the profits). He also dreams up some scenarios of energy technology companies coming up with energy dashboards to help you monitor and optimize your energy usage. There are some examples of how going green helps the US military gain an upper hand. (It seems a lot of money is spent by the military in air-conditioning! By building unconventional and greener bases, they reduce or eliminate the demand for transporting gasoline to the bases, thus saving money and the lives of people who transport the gasoline!)

Overall, I liked this book a lot. It surely increased my awareness to the global warming and taught me to look at all perspectives (including the negative externalities) of different alternatives.

Some links:

Finished reading a new book The Adventures of Johnny Bunko by Dan Pink (whose previous book – A Whole New Mind I liked a lot).

This book is unique because it is made entirely of manga style cartoons and it has clear and simple career advice. Instead of listing down the key ideas, I will just embed a presentation by Garr which does a much better job of presenting the ideas (in the same manga style no less!)

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This is the second edition of The Coffeehouse Investor. I had really liked the first edition and I dug this up to see what has changed.

This book is all about three lifelong principles:
1. Don’t put all your eggs in one basket – Diversify your assets to maximize the chances of reaching your financial goals with minimum risk. (Asset Allocation)
2. There is no such thing as free lunch – Markets are efficient. If you find an investment with better returns, it comes with more risk. (Approximate market averages – indexing)
3. Save for rainy day – It’s important to save more than rely on unusual investment returns.

The author stresses the importance of these principles and then advises you to ignore the Wall Street and get on with your life!

Trivia:

Book updates

Finished the following books:
Little Book that Beats the Market Great book on investing! Very easy to read and short too! Joel Greenblatt describes a “magic formula” to rank stocks (based on two criteria: Return on Assets and Earnings yield (reverse of P/E!), rank stocks with higher numbers for both. Add the two ranks and rerank based on sum of the two ranks). Then buy a basket of 20-30 stocks who are top ranked and hold them for 1 year. Sell them all after 1 year, re-apply the formula and buy new stocks with highest rankings. Rinse and Repeat. Based on backtesting with different ways, this portfolio has handily beaten the market averages. I wonder why backtesting was only done for past 13 years when comprehensive US market data is available for 75+ years.

The strategy seems sound and is well supported by theory. (High ROA companies means, good earnings on slim assets. High Earnings yield means they are currently cheap. Using the book’s website you can very easily find the rankings and stocks that you need. The only problem I see with this strategy is implementation. Buying and selling 30 stocks every year (60 transactions) is not cheap (okay, I am an index fund person – 0.19% fund expenses). I could possibly use buyandhold.com or foliofn.com, but they are not cheap. Also the author might turn the website into a paysite (so you have to use something like moneycentral.com to screen your stocks. I will make a couple of mock portfolios to keep watching the strategy for sure.

The Tipping Point I guess I am not a Malcom Gladwell person! This book was on my to-read list for a long time and though I liked the basic premise of the book, somehow I was disappointed by the presentation. I had the exact same reaction after I finished Blink. Anyway…

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Books: Two Travelogues

One fictional:
Life of Pi

The other factual:
Eat, Pray, Love

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Against all Enemies

Against all Enemies: Book CoverAgainst All Enemies: Inside America’s War on Terror is a fascinating account of events that happened inside the White House before and after 9/11 and how the focus shifted from fighting the terrorists to war with Iraq. I got to know about this book after watching Clinton’s interview with Fox News. where he repeatedly asks the interviewer to read this book. The book starts off describing events in situation room and then goes back in history and explains the background of how Al-Qaeda started appearing on CIA’s radar. There is an interesting account of different presidents and their view of terrorism and the changes in the mindset from Cold-War era to terrorism.

Excellent read and is highly recommended…

Book Update

Haven’t been updating the blog recently… Here are some books I read in the last few weeks…

  • A View from the TOP (Audio Book) by Zig Ziglar. A very good audio programme about achieving significance in all aspects of life – Health, Finance, Relationships, Spirituality. This may be the first time I encountered someone being so open about his religious beliefs in a self-help program.
  • Think and Grow Rich - CoverThink and Grow Rich by Napoleon Hill – about creating a burning desire to achieve success and generating ideas.
  • Digital FortressDigital Fortress by Dan Brown – I was fascinated by earlier two books by Dan Brown – Angels and Demons and The DaVinci Code and this one deals with topics that are dearer to me – Security, Encryption, NSA. But I did not find it as gripping as the first two. I was particularly turned off by the concepts (e.g. mutation strings) that the author tries to create for the story to advance, such things just turn the brain off. (That makes me think that maybe I enjoyed the first two books because I do not have any knowledge about the topics of Pope, Illuminati, Christian history)
  • Deception PointDeception Point – by Dan Brown. This was even more boring about a new discovery by NASA, the politics, cover-ups, yawn…

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Book updates

From Personality Dev books to pure fiction: These were too difficult to resist:


Angels and Demons

and
The Da Vinci Code
. I really liked the way the story is told. I wonder why any author cannot create such novels based on Indian Mythologies, Ramayan, Mahabharat ? Telling the story of someone trying to find out the Ashwatthama’s gem by getting clues from Bhagwadgeeta ?

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There is a big copyright violation fight going on between Copyright Holders and Google about what is fair use and what is a violation. I came across a great article by Cory Doctorow on this issue. He is firmly on the side of Google on this issue and lists the three main points of contention:

  1. Google should cut copyright holders in for a slice of any revenue that comes from this.
  2. Google should have obtained permission before scanning the GBS books
  3. Although Google only shows excerpts, wily hackers could eventually piece together enough excerpts to reproduce the entire GBS library and then post it on the Internet

He then goes and explains how each of the three points are invalid. As he rightly points out, the biggest threat as an author isn’t piracy, it’s obscurity.

He has quotes Tim O’reilly, who says Piracy is progressive taxation. This appears in this article which is also a must read. That article was written in 2002 and was about legality of online file sharing.

If I were a copyright holder, (I mean a big copyright holder), my own stand would be to let google scan and index all my work (with possible penaulties if any evidence was found that people can hack google’s system to reconstruct the complete work). The publishing industry will definitely move online and I will gain more if people can find links to my work when they are searching for related content.

Book update

Here are the books read in the past few weeks:

Blink : The Power of Thinking Without ThinkingBlink : The Power of Thinking Without Thinking by Malcolm Gladwell is about snap judgements (the author terms this as thinslicing)that we make about things, people. It gives a lot of examples where people make judgements about certain objects (e.g. whether a statue is genuine or fake) or people (whether the teacher is good or not). In many cases the judgements are amazingly correct with no scientific logic behind the judgement, but in other cases they are plain wrong. Malcolm has also written about the topic in this New Yorker article. Though the book has a lot of fascinating examples, I found much of the material common-sense and as you would guess there is no positive or negative about these judgements.

How to Win Friends and Influence PeopleHow to Win Friends and Influence People by Dale Carnegie is about various things that make you popular among people. As we all find out by experience, people that are most popular and/or make a lot of money are not necessarily geniuses, but they all have very good people skills. Some pieces of advice from the book: Never critisize, Praise (not flatter) people to give them importance, Make people want to do the things that you want them to do, Smile. Overall a good book with a nice conversational style (though the examples given are those of people way out in past – hey, the book was written in 1936!)

Permission Marketing : Turning Strangers Into Friends And Friends Into CustomersPermission Marketing : Turning Strangers Into Friends And Friends Into Customers by Seth Godin is about a new way of marketing where the marketer instead of interrupting the consumer, builds a long term relation with him. They offer some goodies in order to get permissions to send messages to the consumers and then they continue offering more and more baits to obtain more permissions. A very good read. Even though Seth works for Yahoo, it seems like their competitor is using his concepts in much more effective ways.

Book updates

This blog is turning into just a list of books I am reading. Anyway, here are some new books read in last month or so:

Execution: The Discipline of Getting Things Done — by Larry Bossidy and Ram Charan (Re-read).

Working with Emotional Intelligence — by Daniel Goleman – develops the ideas of Emotional Intelligence further and provides practical approach for implementing it. The concept of Emotional Intelligence (to me) is very obvious and I did not have much to take from this book.

Permission Marketing : Turning Strangers Into Friends And Friends Into Customers
by Seth Godin

Currently reading: Ready for Anything: 52 Productivity Principles for Work and Life — by David Allen.

Here is a quick list of books read/listened in last few weeks. I will write a brief summary/review for each of them as and when I have the time…

The Psychology of Achievement: Develop the Top Achiever\'s MindsetThe Psychology of Achievement: Develop the Top Achiever’s Mindset

Brian Tracy\'s 21 Secrets to Success21 Secrets to Success

Lead The FieldLead The Field

The Psychology of WinningThe Psychology of Winning

Crucial Conversations: Tools for Talking When Stakes are HighCrucial Conversations: Tools for Talking When Stakes are High

Next on the list:
Jack: Straight from the GutJack: Straight from the Gut

Eat That Frog

Eat That Frog!: 21 Great Ways to Stop Procrastinating and Get More Done in Less TimeEat That Frog!: 21 Great Ways to Stop Procrastinating and Get More Done in Less Time
is a book about getting more things done in the (limited) time that you have. This book is written by Brian Tracy who is a self-made millionaire. The basic premise of the book is that to be more productive, you have to find out that one task that you need to do which will make a difference (and not the task that you feel like doing) and take steps to do it right away with urgency. The book has a lot of good ideas to help you find your biggest frog and eat it!

Recommended for the perpetual procrastinators (yes, that means you!)

Here is a summary of 21 ways to stop procrastinating and getting more things done faster:

  1. Set the table: Decide exactly what to do. Write down goals and objectives.
  2. Plan every day in advance: Think on paper. Every minute spent in planning can save 5-10 minutes in execution.
  3. Apply 80/20 Rule to everything: 20% of activities account for 80% of results. Always concentrate efforts on those top 20%.
  4. Consider the consequences: Most important tasks and priorities are those with most serious consequences. Focus on them.
  5. Practice the ABCDE method continually: Prioritize tasks from A – most important to E – least important to make sure you always work on the most important task.
  6. Focus on key result areas: Identify and determine those results that you absolutely, positively have to get to do your job well, and work on them all day long.
  7. Obey the Law of Forced Efficiency: There is never enough time for everything, but there is always enough time to do the most important things. What are they ?
  8. Prepare thoroughly before you begin: PPPPP Proper prior preparation prevents poor performance.
  9. Do your homework: The more knowledgeable and skilled you become at your key tasks, the faster you start them and sooner you get them done.
  10. Leverage your special talents: Determine what it is that you are very good at doing and throw your whole heart into doing those things very well.
  11. Identify your key constraints: Determine the bottlenecks or choke points, internally or externally, that set the speed at which tou achieve your most important goals and focus on alleviating them.
  12. Take it one oil barrel at a time: You can accomplish biggest and most complicated jo if you just complete it one step at a time.
  13. Put the pressure on yourself: Imagine that you have to leave town for a month and work as if you had to get all your major tasks completed before you left.
  14. Maximize your personal powers: Identify the periods of highest mental and physical energy and structure the most important and demanding tasks around those times.
  15. Motivate yourself into action: Focus on the solution rather than the problem. Always be optimistic and constructive.
  16. Practice creative procrastination: Since you cannot do everything, learn to deliberately put off low value tasks, so that you have enough time to do the few things that really count.
  17. Do the most difficult task first: Begin each day to do the most difficult task, the one task that can make the freatest contrivution to yourself and your work, and resolve to stay at it until it is complete.
  18. Slice and dice the task: Break large, complex tasks down into smaller pieces.
  19. Create large chunks of time: Organize your days around large blocks of time where you can concentrate for extended periods on your most important tasks.
  20. Develop a sense of urgency: Make a habit of moving fast on your key tasks.
  21. Single handle every task: Set clear priorities, start immediately on your most important task, and them work without stopping until the job is 100 percent complete.

The Innovator's DilemmaThe Innovator’s Dilemma is a great book by Clayton M. Christensen. The central theme of the book is that unless specific measures are taken, disruptive innovation causes highly successful businesses to fail. This is not because they are badly managed or are technically incompetent, but because they get pressurized by their existing customers and investors to not commit the resources to the innovation. The markets for disruptive innovation are emerging, low margin, unpredictable and can not contribute substantially to the bottom line of large companies. It also becomes a conflict of values problem for the current cash-cow products and the new innovation. The solution is to form a completely new organization with new management and values and let it grow and gradually shift focus to the new organization.

The book also gives good examples of Computer systems manufactures – mainframe to minicomputers to personal desktop systems, Printer manufacturers – Dot-Matrix vs Laser vs inkjet, Departmental stores to Discount stores.

A very good read.

Update: (2005/06/27) [Here is a link to IT conversation talk with Clayton Christensen](http://www.itconversations.com/shows/detail135.html “IT Conversations”)

The Automatic Millionaire : A Powerful One-Step Plan to Live and Finish RichThe Automatic Millionaire (by David Bach) is a little book telling a simple and automatic formula to become a millionaire. It talks about saving money (by sacrificing costly lattes, cigarrettes etc. if needed), effects of compounding (really dumbs down the argument).

Here is a brief sumary of the book:
* Save at least a few dollars a day. ($5 saved every day and invested will become $948,611 in 40 years)
* Learn to pay yourself first.
* Make everything automatic (by setting up automatic payroll deductions, setting up 401k etc.) Plan for saving from 5-20 % of pretax income in a pretax account (401k/403b/IRA/Roth IRA). Maximize employee matching dollars.
* Set up “rainy day” fund, automate the process. Set aside the money for at least 3 months (upto 6-12 months) of all living expenses. Invest it money market/ savings bond.
* Buy a home and plan on repaying it early by methods like biweekly payments, extra principal payments each month.
* Become debt free – pay off all loans, credit cards, automobiles.
* Automatic tithing – set up regular donations to charity.

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